Answers to your questions about Social Security

[JDPriestly]

5 myths about Social Security

Liz Pullman Weston

Myth No. 1: There is no Social Security trust fund. You may have heard this assertion so often that you'll be surprised to learn that there really IS a Social Security trust fund that collects our payroll taxes and invests the surplus. It's called the Old-Age and Survivors Insurance and Disability Insurance Trust Funds.
What isn't in the trust fund is a big hoard of cash.

. . . .

The problem, of course, is that the government now owes the trust fund so much money -- and relies on its surplus so heavily -- that real problems will be created when it comes time to cash in those IOUs. Uncle Sam is going to need to find another source of income to replace the surplus (or cut spending, or borrow money from somewhere else), plus come up with cash to pay the bonds it's already issued.

Myth No. 2: Congress doesn't pay into Social Security, so it doesn't care about fixing the crisis. The idea that U.S. lawmakers don't pay into Social Security is 25 years out of date. Before 1984, U.S. representatives and senators -- like all other federal employees -- weren't covered by Social Security and didn't pay into the system. Congress passed a law in 1983, which took effect the next year, requiring all of its members (and all federal employees hired after that year) to participate in the system.

. . . .

SSI benefits are paid out of the federal government's general revenues. Medicare is paid for with its own tax and has its own trust fund.
. . . .

http://articles.moneycentral.msn.com/RetirementandWills/CreateaPlan/5mythsAboutSocialSecurity.aspx

Lots of interesting information -- I recommend you read the article. It isn't all that long.

[DJ13]

1. when it comes time to cash in those IOUs. Uncle Sam is going to need to find another source of incom

How about returning to higher taxes on the wealthy?

Problem solved.

[BrklynLiberal]

2. or stop funding wars...that would give us billions and billions..

[BrklynLiberal]

3. Thanks for posting this. Lots of great info, as you said.

[OHdem10]

4. May I respectfully correct you. SS has its own fund . SS TAX.

When General Revenues run short Congress raid SS.

[fasttense]

5. Thank You, Thank You for posting this. I've been looking for info to

bust that MYTH about "when Social Security was enacted people didn't live past 65," or some such nonsense. I knew many states had their own Social Security plans that used 65 to 70. But I didn't know the average life expectancy information.

Thank you so much for debunking Myth No. 3:

"Age 65 was picked as the retirement age because, when Social Security was started in the 1930s, most people were dead by then. The average life expectancy for a baby girl born in 1935 was about 63 years. For a baby boy, it was about 59 years.But those statistics reflect the higher infant and child mortality rates of the times. If you survived childhood, you had a good shot of living beyond retirement age. Men who lived to age 30 in 1935 could expect to last another 37 years. Women at 30 had a 40-year average life expectancy.

If you actually reached retirement age, your prospects for a relatively long retirement were good."

[Exilednight]

6. Hold on a sec ......

"Men who lived to age 30 in 1935 could expect to last another 37 years."

Then that would mean that the average man that lived beyond 30 would live to around 67.

and a woman would average around 70.

Now, if you actually reached retirement age, for a guy, you would only live another 2 years on average. I don't find that to be a good prospect to be a relatively long retirement.

Women had it a little bit better, they could get, on average, 3 years more than a man. Still not that long, but maybe enough time to do some fun stuff.

[JDPriestly]

8. They did not put in nearly as high a percentage of their paychecks

back in the early days of Social Security.

[golfguru]

7. The SS trust fund is not a myth but it is a big fraud

So the gov't raids the SS surplus and spends it in the federal spending budget.
Then it issues an IOU from the US Treasury to the SS Trust fund! What a joke!!

It is exactly the same as I take money out of my left pocket and spend it and
place an IOU chit in my right pocket and claim my left pocket is solvent because
my right pocket owes it money.